Despite the predictions of significantly lower business this year, 2000's order tally by Airbus and Boeing shows that the industry continues to benefit from strong airline demand and a healthy backlog.
The figures hide another story, however, which is that the industry appears to have learned the lessons from the "boom and bust" era of the late 1980s and early 1990s. This highly destructive problem became critical when economic growth came to a sudden halt in the early 1990s, leaving the manufacturers with large numbers of unwanted orders.
Just prior to the last major downturn 10 years ago, the jet airliner order backlog had spiralled to over 3,500 aircraft - higher even than now. Many of these orders were placed almost on a speculative basis, mostly to cover anticipated growth, with the rest to replace in-service fleets.
Airlines and leasing companies alike went on a buying frenzy, grabbing an increasingly limited number of production slots as air transport underwent unprecedented growth.
Then recession hit and the airlines quickly realised that there was still considerable life left in their paid-for, if fuel inefficient, old fleets, while suddenly little or no capacity growth was required. Telephones in Toulouse, Seattle and Long Beach were red hot as customers called in to cancel orders or renegotiate delivery schedules. Unfortunately the timing could not have been worse, as aircraft were rolling off the assembly lines at record rates. With reaction times measured in years rather than months, the manufacturers were left high and dry, facing the disastrous prospect of producing unwanted "white-tail" aircraft.
Ten years on everyone is older and wiser. Even after a particularly good year in 2000, order backlogs are under control. Output is at a sensible level with only modest, steady ramp-ups planned. Production lead times have also been substantially reduced and the amount of work outsourced increased, allowing Airbus and Boeing to respond much more quickly to changing market conditions. This is turn has helped eliminate much of the speculative, long term ordering of the past.
Significantly, this time fleet replacement need is a must rather than a luxury - time really has run out for noisy older generation aircraft, which are being phased out as airlines are forced to meet ever tougher environmental standards.
With order backlogs at record levels, Airbus and Boeing are set fair for several years of stability. The hope, therefore, is that the hard lessons of the early 1990s will never be forgotten.
Source: Flight International
